I was watching my favourite Canadian business show, Dragon’s Den, the other day. Arlene Dickenson, one on the more sensitive Canadian Dragon’s commented on a pitching entrepreneur that his business had a very well balanced ‘triple bottom line.’
I was reminded of the bygone days when ‘profit and loss’ was clearly defined as the amount of profit over expenditures that guided the businessman in every decision facing his company.
I remember the world’s worst industrial disaster, the Union Carbide fiasco in Bhopal India, in 1984, that left thousands dead and over half a million suffering because Union Carbide put profit ahead of corporate responsibility while carelessly leaking pesticide gas to people surrounding their plant.
Pacific Gas & Electric
Corporate responsibility was non-existent and profit was the only path these corporate giants followed. Thankfully with public exposure the PG&E’s of the world are feeling the public wrath for past atrocities.
Business writer John Elkington coined the phrase, ‘triple bottom line’ in 1994. It espouses that a responsible corporation must take into account three things when doing bottom line accounting. He defined a responsible corporation’s accounting practises as encompassing financial, social and environmental factors when determining success. A big improvement from companies selling asbestos for homes, putting pesticides ahead of people and money ahead of the environment.
I look at Alberta’s tar sands (they prefer to call oil sands) and wonder where all those tailing ponds eventually end up. Then I thought there must be a better way!
Millennials have it right. As I was lecturing my Grad students at the New York Institute of Technology (Vancouver campus), I spoke of the mindset of a millennial from a marketing viewpoint. They believe in a life-work balance, familial over corporate values and volunteerism. This is certainly a far cry from my Baby Boomer work-centric generation.
The 2014 Brookings publication showed a generational adherence to corporate social responsibility, with the National Society of High School Scholars (NSHSS) 2013 survey and Universum’s 2011 survey, depicting a preference to work for companies engaged in the betterment of society.
Millennials would be aghast at PG&E, Union Carbide, Monsanto to name a few. Those relics of another time will no longer be welcome in the millennials’ world that are expected to make up 50% of the population by 2020.
When they embrace the triple bottom line they are serious. Start-ups are including innovative green technologies, organic farming, clean energy and sustainable industries that indicate, in theory, that they want to make society a better place. The jury is out whether they can attain all of the sustainable initiatives while maintaining profitability.
While they are trying for a paradigm shift it is also debatable whether it is simply lip service. I’m reminded of my generation’s peace, love and happiness and wondered where and why we failed to improve society.
If you are like me when you invest your money in a mutual fund that’s the end of your responsibility. It’s gone into that financial milieu while we hope it increases in value.Some investments may provide great returns while impacting negatively on our communities and our environment. The scenario indicates that not only must people consider our corporations in terms of social, environmental and financial as indicators of success but also where they invest their earnings.
Some Canadian businesses are putting social and environmental impact right alongside company profits. The Business Development Bank of Canada, Bullfrog Power, and SPUD.ca are using forward-thinking leadership to make their businesses social responsible while making money at the same time.
These B Corps (a legally defined variation of the usual corporation) have a mandate to meet social sustainability and environmental performance standards, meet accountability standards, and to be transparent to the public. B Corps have been responsible for promoting everything from green technology to fair trade products in 38 countries, and it’s growing.
While I imagine that most B Corps do so for the right reason you must consider that some do it for the appearance of being socially responsible. I have no doubt that Patagonia and ice cream maker Ben & Jerry’s, a Unilever subsidiary are social responsible but I am doubtful over Unilever manufacturer of detergents. It took them three years (from 2012-2015) to rid their products of plastic microbeads that have caused problems in our oceans.
I wonder whether the social attitudes of new generations will fade as it did for past advocates of social responsibility. Start-ups hold the key to innovation, challenging the status quo and following their hearts versus their bottom line. Let’s hope the challenge of making our businesses sustainable will survive the addiction of earning large profits over social responsibility.